FX.co ★ Yen Extends Rally on Intervention Fears

The Japanese yen gained strength, reaching approximately 155 per dollar on Monday, marking a 2% rise over two days to achieve its highest level in over a month. This surge occurred as the market anticipated a potential coordinated intervention by Tokyo and Washington to bolster the currency. On Sunday, Prime Minister Sanae Takaichi stated that the government was prepared to take "necessary steps" to mitigate speculative market actions, underlining the official commitment to stabilize the yen. Further impetus was provided by reports that the New York Federal Reserve had consulted with dealers on dollar/yen levels on Friday, a move widely seen as laying the groundwork for possible joint FX market intervention. The yen's appreciation was also supported by broad dollar weakness, stemming from heightened geopolitical and trade risks and speculation that President Donald Trump might soon appoint a more dovish successor to Fed Chair Jerome Powell, adding pressure to the US dollar.